Ask Big Questions Behind Sritex's Impromptu Rescue Policy And The Emergence Of Erick Thohir

Workers walk out of the factory next to the statue of the founder of Sritex HM. Lukminto at the Sri Rejeki Isman Tbk (Sritex) Factory in Sukoharjo, Central Java, Friday (28/2/2025). (ANTARA/Mohammad Ayudha/tom)

JAKARTA - Thousands of employees of PT Sri Rejeki Isman (Sritex) who were laid off (PHK) are reported to be able to return to work in the next two weeks.

After operating since 1966, PT Sritex will no longer operate starting March 1, 2025, after not being able to pay debts or bankruptcy. The company that produces military uniforms for various countries in the world has a debt of 1.597 billion US dollars or around Rp. 26.2 trillion from separatist creditors worth Rp. 716.7 billion and a concurrent creditor bill of Rp. 25.3 trillion.

In total there are more than 10,000 Sritex Group employees who are laid off from January to February 2025.

However, shortly after being declared bankrupt, a breath of fresh air emerged by President Prabowo Subianto through his right hand, Minister of State Secretary (Mensesneg) Prasetyo Hadi. He said Sritex would open with a new scheme.

The opening of the operation with the new scheme, he said, would open space for 8,000 Sritex workers to work again.

"On the instructions of the President (Prabowo), the President is very concerned about how the government is looking for a way out, especially regarding the problems that will befall workers at PTSritex," said Prasetyo at a press conference at the Presidential Office, Monday (3/3).

"Our hope is from the government, of course, all workers who have been employees at PT Sritex, there are approximately 4 companies. Approximately 8,000 employees to be able to all of them will return to work with a new scheme," said Pras.

In a press conference held earlier this week, Prabowo was accompanied by a number of parties including the Minister of Manpower Yassierli, Minister of State-Owned Enterprises (BUMN) Erick Thohir, Coordinator of the Sritex Group Workers Union Slamet Kaswanto, and bankruptcy curator Nurma Sadikin.

Curator Sritex said the initial option that emerged regarding the new operating scheme was the existence of investors interested in renting tools in the form of heavy equipment belonging to the Sritex Group company. It is not yet clear who the investor is.

In addition, Nurma also cannot confirm whether all Sritex employees who have been laid off can be permanently recruited by new investors or only temporarily as long as the textile company's heavy equipment is leased.

Seeing the explanation of the Minister of Manpower, economist Bright Institute Muhammad Andri Perdana considered the agreement only temporary.

This statement, which emerged after President Prabowo's discussion with a number of his subordinates, according to Andri, was not a long-term settlement. He also doubts that there are investors who want to buy Sritex considering that the company's debt is mounting.

"So actually this is not taking over the company, it's just renting tools. Because of its temporary nature, the fate of the reabsorbed workers is also temporary because this equipment rental company only wants to hire (Sritex labor) during the equipment rental period," said Andri when contacted by VOI.

"Actually, there is no certainty, so the long term is not certain," he added.

The same thing was conveyed by legal practitioner Masykur Isnan. The presence of investors, based on information in public spaces, only focuses on renting Sritex tools which are currently under the curator.

This means that it will be limited to the term of the rental agreement, so that former Sritex workers will most likely be recruited with employment status with a certain period of work agreement (pkwt) or contract.

"After the completion of the period of time, this needs to be a concern again, besides that, whether it is able to absorb all former workers, the basis for their qualifications or job requirements, and so on, this must also be a focus to mitigate jealousy and so on," explained Isnan via text message.

The most important thing right now, said Isnan, is the fulfillment of the rights of former Sritex employees, namely severance pay, job loss guarantees (JKP), old age insurance (JHT), and holiday allowances (THR).

"As well as certainty of work relationships for a certain period of time (PKWTT) or still in the future to open up definite job opportunities," he added

Instead of only renting a large Sritex tool, Andri said creditors actually want investors who can buy Sritex to pay off their debts and their assets are liquidated.

Unfortunately, in terms of business, it will be very difficult to hope that there are parties who want to buy Sritex with accumulated debt conditions. Moreover, the condition of the textile industry in the country is also not doing well in recent years due to early deindustrialization.

"I myself am skeptical if there is a private sector that intends to become an investor who buys Sritex ownership, unless the 'investor' comes from state assignments in the form of state-owned enterprises," explained Andri.

Erick Thohir's presence as Minister of SOEs in a press conference on Sritex's future discussions was in the spotlight of many parties, although he did not make any statements at that moment.

This raises speculation that Sritex will be 'saved by the state', including using Danantara, a state investment management agency that was just launched by President Prabowo at the end of February. If this happens, said Andri, it will lead to bad precedents.

The presence of ET is a concern, whether SOEs will become bankrupt business savers. If saved (by the state) it will become a moral hazard," he explained.

"This is not something that provides good precedent for other business people. Because of the impression that bankruptcy companies can be pinned by the state, but they don't. Hopefully this doesn't happen," he concluded.